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From the March 2002 Watchdog Report

Never Again!

Red Cross Needs Policy of Cooperation in Major Disasters

Other Americans and I were outraged over the American Red Cross’ early refusal to participate in a shared computerized database of the victims of the September 11 disaster. It took many weeks of pressure from the New York Attorney General, AIP and others before the Red Cross finally agreed to share its information on specific victims with other charities in a centralized database.

The exasperation of the New York Attorney General, Eliot Spitzer, in his efforts to gain the full cooperation of the Red Cross in the formation of a shared data base are well expressed in his November 2001 statement before the Subcommittee on Oversight of the House of Representatives’ Committee on Ways and Means. “…[We] have received from the Red Cross a statement that they will be our partner in generating the database that is essential, but I will tell you it has been a tortured process getting them to that point. It has been a process of two steps forward, one step back. It has been a process of legalisms being inserted into a discussion when there is an imperative that we move quickly. Yes, the Red Cross said we need a waiver; and we said of course we can get a waiver. We will do that. But it is now 8 weeks after this disaster, and as of yet we do not have the acquiescence of the Red Cross to a process that should be simple. So I will state unambiguously my patience is running. I know your patience is running and the patience of the American public is running, and well it should. In 8 weeks, these issues should be resolved. They should be answered. I think that as the days go by our trust in the capacity of the Red Cross to handle these situations is diminishing.”

If there ever is another large-scale disaster in this country of the magnitude of September 11th, the American Red Cross should immediately lead or at minimum cooperate with other relief/recovery charities in the creation of a shared victims’ database and uniform aid request forms. The Red Cross urgently needs a formal written policy, which should be approved by its full board of directors, that will demonstrate its intent to fully cooperate in a shared database with other charities in the event of a future major disaster. The policy would go a long way in helping to avoid the delays and scrambling around caused by the Red Cross’ prior refusal to participate in a shared database. AIP encourages its members to personally communicate to the national office of the Red Cross and/or your local chapter the importance of such a policy.

AIP strongly believes that a victim’s database is essential for a coordinated, timely, fair and equitable distribution of aid during a huge disaster involving over 100 charities. Without this sharing of information on specific victims, charities are more likely to waste valuable time by seeking out the same victims' families to help. Lack of a centralized database could also lead to double- and even triple-dipping by unscrupulous victims, who could be tempted to have the same bill or other need paid for numerous times. Also, not having uniform aid application forms that could be easily inserted into a database puts an undue burden on victims to have to contact numerous groups and fill out a large numbers of forms.

I asked Darren Irby, Officer of Disaster Communications of the American Red Cross, about its interest in a policy mandating participation in a shared database in light of September 11. He said that there was no previous Red Cross policy on participation in a shared database and that conversations were being held in all areas of the disaster in a myriad of issues but no policy had been established with respect to a database.

Mr. Irby said that Red Cross is involved in 60,000 smaller disasters each year, primarily apartment and house fires, according to the Red Cross’ web site, and was never before 9/11 asked to participate in a shared database. I mentioned the Oklahoma City federal building bombing in 1995 and he admitted that Red Cross had used the database with information of other charities but did not include its own information in it. He also said that the Red Cross does participate in VOAD (Voluntary Organizations Active in Disaster) to help avoid duplicated efforts.

In my oral testimony of last November before the Oversight Subcommittee on the House Ways and Means Committee, I asked that Congress consider legislation to mandate that charities participate in a centralized shared database in the event of a future large-scale crisis. I do think that the American Red Cross and other disaster relief charities should develop their own formal cooperation policies so that the government does not have to intervene.

The oversight of the120 year-old American Red Cross is unlike any other nonprofit organization. The Red Cross is not a private organization but is an instrumentality of the United States Government. The Red Cross is required to submit an annual report to the Secretary of Defense, including a “full, complete, and itemized report of receipts and expenditures of any kind” and to be audited by the Department of Defense. Nonprofits that raise money nationally are required to register in about 40 States; 30 of these states exempt the American Red Cross. The 50-member Board of Governors of the Red Cross includes eight members appointed by the President of the United States, which often include high level officials. The Red Cross’ current Board includes General Richard D. Myers, Chairman of the Joint Chiefs of Staff and Donald L. Evans, Secretary of Commerce.

The Red Cross is a good example of why it is important to go beyond AIP’s letter grade ratings and understand more than a rating of financial efficiency when choosing a charity to support. The Red Cross’ “A” rating from AIP is based on 90% of its budget being spent on program services and on it spending only $18 to raise each $100. It does not reflect the operational problems of this organization.

The Washington Post and other media have reported on the Red Cross’ pattern over the past decade of not using disaster donations for the intended victims until pressured by the public and governmental officials. Examples in addition to the recent World Trade Center and Pentagon attacks include the San Diego wildfires in January 2001, the Red River flooding in Minnesota in 1997, the federal building bombing in Oklahoma City in 1995 and the Northern California earthquake in 1989. AIP continues to warn donors that if they want their donation to go to a specific disaster than they need to designate their contribution for this purpose. We suggest that donors write a letter or note with their checks. If donors only write the restriction on their checks, it might not be noticed by a charity that uses automated machinery for check processing.

The Red Cross has also come under scrutiny in recent months over its core program for collecting blood. According to the Food and Drug Administration (FDA), the Red Cross has violated rules over the past 16 years for its collection and handling of blood. In a December 2001 press release the FDA asked a Federal Court to hold the Red Cross in contempt of a 1993 consent degree concerning the handling of its blood program. The FDA also asked the court for the authority to level fines against the Red Cross for future violations. The FDA cited the following violations in a February-April 2000 inspection of the Red Cross’ national headquarters: “incorrect labeling and release of blood potentially contaminated with cytomegalovirus; lack of adequate quarantine and inventory controls; inadequate donor registration controls and failure to maintain accurate and current lists of deferred donors; and erroneous, premature release of computerized ‘holds’ on blood donations.”

The Red Cross stated in a December 2001 press releases that it will “vigorously contest the FDA’s motion” and that it “has made significant progress in improving the blood system.” The organization added: “We also have acknowledged that there is more to be done. But we cannot, and will not, agree to bureaucratic, ineffective and unauthorized requirements imposed by the staff of the FDA.”

The American Red Cross, a $2.5 billion organization (the fifth largest charity in total income) which can jump on a moments notice to help in a crisis and controls nearly one-half of our nation’s blood supply, is too vital to our nation to not support. But this organization, particularly in light of its numerous problems, needs to be motivated to more often “do the right thing.”

CHARITIES FINALLY UNITE TO FORM SHARED DATABASE
AIP applauds the formation in December 2001 of the 9/11 United Services Group, dedicated to “forming and maintaining a comprehensive database that will help track services provided at participating organizations,” according to the group’s press release. IBM is developing the database on a pro bono basis. The Group, which is headed by Robert J. Hurst, Vice Chairman of Goldman Sachs, will work “to make sure everyone who needs assistance receives it in an effective, timely, and supportive manner.” Their toll free number for those who need help as a result of the September 11 crisis is: 866-689-HELP. Participating organizations include the American Red Cross in Greater New York; Asian American Federation of New York; Black Agency Executives, Inc.; The Catholic Charities of the Archdiocese of New York; Catholic Charities Diocese of Brooklyn; Federation of Protestant Welfare Agencies, Inc.; Hispanic Federation; Human Services Council; Mental Health Association of New York City, Inc.; Safe Horizon; The Salvation Army; UJA-Federation of New York; and United Neighborhood Houses of New York.

 
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